No one cares but the guys who got their political science Ph.D’s before 1988. They are the Maytag repairmen of academics and they finally know what to do with themselves, which is try to scare the hell out of us. Apparently that doesn’t work on the three people up this morning to trade futures.

So be it. I’ve been saying all summer that there are a lot of emotions at play in markets and that’s been injecting the proceedings with a bearish bias. But again, this emotion and fear does nothing more than create a cover bid. I deplore Trump’s alleged intention to undo DACA, and I think it would be a bad thing for the country, but that’s no reason to short SPUs. Nor is it a reason to doubt the possibility of tax cuts in the near future, or to worry about the debt ceiling and funding bill. It’s a lot of noise and it’s going to be hard for markets to have a real selloff while that noise persists.

Capital Economics' John Higgins doesn't expect a lot more market volatility now that summer is over:

But outright conflict between the US and North Korea will hopefully be avoided; a debt ceiling crisis in the US may be averted at the last minute; the appreciation of the euro has strengthened the case for the ECB to delay the formal announcement of asset purchase tapering until October; the FOMC has already signalled that it plans to start to trim its balance sheet soon; and Angela Merkel appears to be on track to win another term as German Chancellor.

These events aside, volatility won’t necessarily pick up soon simply because summer is over, even if there is an increase in turnover. In the past quarter of a century, implied volatility in the US stock market has barely been any higher on average in September than it has been in July and August. It is a similar story in the US Treasury market, judging by the average level of the MOVE index during these periods.

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